Wednesday, December 19, 2007

I don't trade 5M chart often but it's much more clear than 1M most of the times : on this one (in the circle) i have a double TL break, a MA rejection, PLUS a textbook Zero line rejection on the CCI. What do you need more? A handsome drop followed shortly after this. During that time I was busy with 1M noise.

Tuesday, December 18, 2007

The pre-London was boring today, I thought that could continue like that all day long and I closed charts. But the nice swings were there, later on. So i didn't trade at all. I have very busy days with my day job till end of year, need some rest too.

Monday, December 17, 2007

Entered short on horizontal breakout at 163,50, but a retracement followed, a round number rebound. It went till -13, one pip from my stop and i was lucky enough to see price reverse at this point, giving a quick +14 pips gain. Better (and safer) entry was at 12:26 time, after the MA rejection and fast Guppy EMAs rejection.

Sunday, December 16, 2007

Sunday, December 9, 2007

This is becoming an obsession for me: I listened to it all the weekend long, in the plane etc. The guy is phenomenal. The best piano trio in the last few years, IMHO. Proving that sensual, spiritual jazz can come even from icy Norway.

"As silence can sometimes speak as loudly as thunder, and insofar as careful elaboration of melody can be just as compelling as more vivid expansion, Gustavsen's trio makes a clear case for the elusive power of restraint."

A bargain right now with peanut dollar on Amazon. Two more excellent cds of Tord with ECM.

Few trades this ending week, compromised by the important mistake I did on Tuesday, wich gave the big av. loss showed above. The increased W/L ratio had no effect because of this, and the week ended slightly down.

Friday, November 30, 2007

The monthly results show, more clearly than weekly ones, my weak point : big average loss, in comparison with av. winner. My R/R (reward/risk) ratio is only 0,71 and that should be bigger than 1,0. The positive result of this month, despite the huge amount paid as commissions (due to overtrading), was the product of a rather good W/L ratio (1,8).

If I only keep this W/L ratio and increase the R/R ratio to 1,0, with fewer trades if possible, the gains will be much bigger next month.

This week 5 differs from the previous in just one point : average loss. The simple fact that the av. loss decreased by 30%, and only this, gave a positive sign to this ending week, instead of the important loss of the previous one.

Overtrading is omnipresent, 54 trades for 3 trading days are quite a lot.

i should increase the W/L ratio next week, by selecting the safest only trades, and decrease av. loss below 10.

Thursday, November 29, 2007

Stayed sideline today, enjoyed the day. Life is sweet whithout charts. No trades tomorrow neither. The reason : I feel very tired and I am very bad trader when tired, so I need to protect my November gains.

Wednesday, November 28, 2007

Yesterday's euphoria gave place to a bad trading day. Too many trades again, many of them not justified at all. All that in an easy, one-way trending day. Luckily enough, I had lowered the lot size to lock the November gains.

Tuesday, November 27, 2007

A nice day for me. 60 pips won, little by little in 10 trades (5x2). 8 winners, 2 losers, +6,16% on account. As soon as I got this ( identical with yesterday gains before the catastrophy), I stopped trading.

Before the trades shown here, I was at +70 hard earned pips and +6,75% on account. But it wasn't enough, so I continued trading like a madman or a gambler. I shorted 2 retracements as reversals, -25p, -11p. Finally I went long, when, precisely the uptrend was exhausted! -21p. At this point I was -44 p and -4%! I wiped out all my nice earnings and was deeply in the red too!

I took back the pips later on and finally I break even on account for the day with a lot of stress. How easily a terrific day can turn to a nighmare!...

Sunday, November 25, 2007

2nd bad week in a row, due to several factors. First of all, overtrading, 67 trades this week, 50 last week. The ideal would be around 40, even less if possible. 2nd reason is the poor selection of setups, I do not search the high probability ones only anymore. More losing trades that way, W/L ratio dropped again to 1,2. I will try to focus on these 2 elements next week, while trying to decrease ( to <10) the average loss.November is still up by 8,02%. After the first 2 weeks I was at +39%. I could stop at this point and have a perfect month.

Friday, November 23, 2007

The very same mistake with the one of the previous analysis (see post)! Exact copy of it. Obviously the analysis didn't help me to avoid it this time. Maybe because its not a rational process, it is my deep psychological incapacity to accept my mistakes. It's egoism, proudness or who knows. Anyway, i cannot trade like this.

I shorted this at 9:30 (8:30 CET), before the break out (1rst mistake). The break didn't happen and CCI started to show a possible reverse. Price made a TL break on the opposite direction indeed and started climbing. I didn't close at -5 or -10p, because I could not accept that I was wrong going short. The TL break (in the circle) was THE point to close. I let it go, praying for a new drop and finally I killed it at -32!... (and heart pace 190...).

I am not only losing money by doing stupid things, I also lose my confidence, a sure way to make a bigger mistake next time. This is how my trading deteriorated in the last 10 days.

I recovered later 21 pips of the 32 lost (see chart). But my confidence didn't recover.

Albert Einstein again: "The difference between stupidity and genius is that genius has its limits. "

From my very early age, I had the "aura" of the very smart child. Time passes, you grow up believing that you are something very special. But with this Forex thing I had the biggest humility lesson of my entire life. I am not smarter than the markets.

What can I say? The chart speaks loud and clear. A perfect suicide method is to trade a non-trading market. And trying to get back the lost pips, revenge trading. Just impulsions, not reasoning at all. How to kill the gambler inside me?

Sunday, November 18, 2007

Weekly pips are still on the plus side at the end of Week 3 (see above), but the lot decrease after the big loss and commissions made this important weekly loss of 11,09%. 2 signs of trading deterioration : W/L ratio is almost the half comparing to previous week, and average loss increased to 24,1 p, from 15,7 last week. I should take high probability trades only if I want to increase the W/L again, and cut the losses early, to lower the average loss.

Friday, November 16, 2007

Thursday, November 15, 2007

20 trades today (10x2 lots), 14 winners, 6 losers. 76 pips won. Got back the pips I lost yesterday (81), but the irony is that I was trading with 45% smaller lots, after the previous shock. That means a 5,43% increase only of my account.

" the BIG mistake is imminent" , I was writing yesterday. It was indeed! I did it today. In less than 2 hours, I lost 19% of my account. How? By entering trades quite randomly, whithout any sense of timing and capital preservation. Trying to get back by all means the initially lost few pips (revenge trading).

First trade was ok, on the previous low break, -10p. Re-entered to win 12p. But it was not enough for me, re-entered to sold the bottom, -19p. 4th trade was pure impulsion, a no-sense, -15p. And the fifth was the masterpiece, against all odds, a sell again, while the 1M and 5M indicators were showing a reverse. The reverse just happened, trade not closed,-40 pips. -72p (-144) in total, what a smart trading!

Tuesday, November 13, 2007

Monday, November 12, 2007

I was trapped long on the small uptrend early today, 4 losing trades (2x2 lots) , the alarming was the average loss again : -44,5p!... I still can't close losing trades early. I got the pips back later on the euro's free fall, but not all the money because of commissions and lot size decrease after the initial big losses. So in total, 13 trades, 8 W, 5L, +10 pips gain, -2,95% account loss.

Saturday, November 10, 2007

I enter all trades with 2 lots. Starting from today, I will count the 2 lots as separate trades, to avoid complicate averaging when adding and substracting lots at different prices. The template above reflects this new calculation. Won pips will be double, and the lost ones too!... The performance doesn't change of course.

Comparing the first 2 weeks, week 2 matches week 1 in performance, but this was obtained with more fear and stress, due to important (in size) losses I had in the last days. Average loss increased from 10,7 to 15,7, lowering the R/R ratio to 0,61, wich should be above 1. W/L ratio is stable around 3, while the number of trades is increased by 50%, driving the commissions paid at 29% of the net gains, quite a lot. i will try to not overtrade next week.

The lot size will be increased by 10% on Monday.November is up by 39,62%. Monthly target (40%) is almost met. Hope that continues.

Friday, November 9, 2007

With this amazing pair, we get at least one wild day per month, as it was today. I got my bits (31,5 pips) from this 300p move. The fear of a sharp retracement makes me close the trades too early. And then I re-enter lower and the danger increases. 6 trades in total, 5 winners, 1 loser, +6,43% on account.

The carry trade unwinding happened in a very harsh way today. I wonder how many of you catched the eur/jpy collapse. I was out for business most of the day, i got some pips early in the morning and in the afternoon. Anyway, I don't feel comfortable with these huge movements because when I see them, I am litterally driven by the impulsion to catch the train, not reasoning anymore, and this can be fatal with this pair where the retracements are also huge. You can easily get -80p in the face, waiting for the big trend to resume.

Thursday, November 8, 2007

Short 1 after previous low break. 15 pips gain at no time. +5% on the account. I could stop trading at ths point and have a perfect day. BUT I felt I was leaving the party early, so I re-entered, to sell a classic bottom!... Sharp retracement, rule for 10p stoploss was violated again. i had to close far away, half at -28p, half at -38p. averaging 33p loss...

I did this capital mistake twice in 2 days. Discipline is deteriorating. My account went from +5% to -2,45% decrease for the day. Greed, greed greed...

Perfect little setup to start the day: Long at 165.45, after TL (green) break (and MA and CCI support). Closed half at +8p and the other at +14p, averaging 11p gain. The uptrend may continue or may not. I am +2,27% on my account and I can read or work for the rest of the day.

Wednesday, November 7, 2007

The day was in a downtrend, even my early losing trade would be largely positive if not closed. But how can I anticipate this at 10 in the morning? I know traders who lost their homes because of this kind of anticipations. Anyway, after the big risk (and important loss) I took early today, I tried to play safe later on to break even. Had 6 trades in total, 1 (big) loser, 5 winners. 12 pips won, 1,87 % account increase.

I shorted this at 31 on the pre -London session, assuming a drop continuation, despite the MACD and CCI divergence and ... I was trapped there! Price reversed sharply and I could not close this losing position. The move was steady : -10p, -20, -30, -50... Several trendlines breaks were there to tell one thing : the move is up. No way, i was just looking the euro climbing. It stopped at 167.05. At this point i was -74p and -18 % on my account! The price reversed then , I closed half at 166.74 and -43p and half at 44 and -13p, averaging 28p loss and -6,65 % on account. Bad execution, bad money management, everything was bad on this. What if the price didn't reverse ? I would close the trade at -100p, maybe more, maybe not close at all... The sky is the limit...

One big mistake, one bad execution is more than enough to eat back your hard earned pips. This is the capital mistake one can do, a fatal one. If you want to kill your account, don't use stoploss or constantly move them.

I cannot scalp using position trading methods.

Will remember long this Wednesday. i will not be lucky next time... Must keep the 10p SL by all means.

I entered long on the pre-London uptrend, after MA support and CCI above 100. I exited at Resistance pivot line for a +10p. Not bad for a 2 min. trade. I could take more staying in, but the res line could also eliminate my profit.

Woke up at 6 to listen again this cd. Michael Brecker, a few months before his death, invites his friends (Hancock, Mehldau, Metheny etc) in the studio and records his testament. He knows he is dying and this is in every note. Nothing sentimental, just pure emotion. I rarely heard something more emotional. Everything is there, the melody, the mystic, the best saxo, tremendous piano. My younger daughter joined me later: "Why are you crying daddy?"

I skipped easy entry at 9:52 and 165,90, then I was running again behind the price. Trade 1, at previous low break was ok (+10p). Then I felt I was missing a lot of this move (greed) and I re-shorted at 36 (trade 2), an immediate sharp retracement, and extended stop was hitted. -17p. Re-shorted (trade 3) at 47, but 200 EMA on the hourly was supporting price well. I felt that the complete reverse was imminent (fear). I closed one half at -5p, let the other to his fate.Price reached 80, averaging loss at -20, beyond my "strict" stoploss rules, I could not close this. Price finally dropped again and I closed this bloody half at +15, averaging trade at +5. So I risked 20 to win 5! Not a sparrow wise.

Friday, November 2, 2007

NFP data didn't provide a clear direction to this pair, the swings were large enough to burn the 100 p. stoplosses of the medium term traders who went long at 167. Scalping protected me once again, I got out of this with +18 pips, I could do better. 4 winning trades today and 2 losers. +3,20 % account increase.

On the long way down of this pair, i shorted again after the resistance line (green) break. I closed for +13,5 p gain approaching a fibo line and because CCI was making higher lows. The reverse happened just 10 minutes later.

Long at upper little red line BEFORE the local resistance was cleared (first mistake). The stop loss then was placed too close and not below moving average 21 and resistance line. Price hitted stop, -10p, moved just 1 pip lower and then reversed to move up 50 pips... C' est la vie or my poor execution.

"When i trade at home, I often watch the sparrows in my garden. When I feed them bread, they take just a little piece at a time and fly away.They keep on flying back and forth, taking small bits of bread. You will never be able to shoot a sparrow, it is just too fast. That is the way I day trade". M. Weinstein.

"Μηδείς αγεωμέτρητος εισίτω μοι την θύραν". Plato

"Toute lucidité est la conscience d'une perte". E. Cioran

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There is nothing to sell on this blog. No signals, no "systems" for sale. Just my trading plan and the recording of my trades on eur/usd and the fx euro future recently. And the books, the music, the films I like.

The Forexbird is a professional currency trader. He is also photographer and engineer, a maths and music addict and curious about everything.

Short entry on the rush this one, a very dangerous one. I didn't enter at the 70 level break, then i was running after the price. Entry...

Risk Disclosure

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The author is not liable for any loss or damage which may arise directly or indirectly from the content of this website.